Based on the aggregated intelligence of 115,000 investors participating in Motley Fool CAPS, the Fool's free investing community, drugstore giant Walgreen (NYSE:WAG) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Walgreen's business, and see what CAPS investors are saying about the stock right now.

Walgreen facts



Deerfield, Ill. (1901)

Market Cap

$36.06 billion



TTM Revenue

$57.86 billion


CEO Jeffrey Rein (since 2006);

COO Gregory Wasson (since 2007)

Return on Equity (avg. last three years)


CAPS members bullish on WAG also bullish on

General Electric (NYSE:GE),

Microsoft (NASDAQ:MSFT),

Cisco Systems (NASDAQ:CSCO)

CAPS members bearish on WAG also bearish on

Starbucks (NASDAQ:SBUX),

Wal-Mart Stores,

Ford Motor (NYSE:F)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 393 of the 413 All-Star members who have rated Walgreen -- some 95% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include joeGuitar and mm20001, both of whom are ranked in the top 10% of our community.

In February 2007, joeGuitar shared some firsthand experiences with our community: "Every [Walgreen] I've gone to is well-run. ... Aging population, more meds, well-run company, very good service, and innovative.... Go [Walgreen]!"

A pitch from mm20001 just two weeks ago shared that bullish optimism, breaking down the stock's seemingly cheapish valuation:

Despite the fact that Walgreen's has grown earnings at an amazingly steady 15% annual rate for the last 8 years (and longer), the stock is actually cheaper today than it was 8 years ago. The stock price certainly got ahead of itself in the late 90s and going into the 21st century with a high 45 P/E in Aug 2000, but has now come down to a reasonable P/E of 16 for the 12 trailing months. Add in the little debt on their books (as compared to CVS (NYSE:CVS), for example), and 5yr growth estimates of 14%, Walgreen's is a long-term buy today.

What do you think about Walgreen, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Microsoft, Starbucks, and Wal-Mart are Motley Fool Inside Value recommendations. Starbucks is also a Stock Advisor pick. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days. You'll have access to current and past stock recommendations and see what it means to be a Fool on Wall Street.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.